Media Releases

FAO says cap and trade will likely have an impact on the province’s surplus/deficit

MEDIA RELEASE

FAO SAYS CAP AND TRADE WILL LIKELY HAVE AN IMPACT ON THE PROVINCE’S SURPLUS/DEFICIT

TORONTO, November 23, 2016 – The Honourable J. David Wake, Ontario’s Temporary Financial Accountability Officer says, “cap and trade will likely have an impact on the Province’s surplus/deficit.”

The Financial Accountability Officer of Ontario has just released An Assessment of the Fiscal Impact of Cap and Trade, analyzing the fiscal impact of cap and trade, i.e. how cap and trade will impact the Province’s projected surplus/deficit. Under cap and trade, the Province would sell allowances to emit greenhouse gases. It would then spend the funds raised on initiatives to further reduce greenhouse gas emissions.

Cap and trade will likely have an impact on the Province’s surplus/deficit if the Province:

  • Uses the funds to finance capital projects or programs that are already planned, cap and trade expenses would be lower than revenues, resulting in a reduction in the deficit/increase in the surplus;
  • Commits to spending that is difficult to reduce or stop, and revenues are lower than anticipated, the deficit could be increased or surplus reduced; and
  • Does not spend all of the cash raised from cap and trade in the same year, it could reduce the deficit (or increase the surplus) in that year and increase the deficit (or reduce the surplus) in future years.

Read the FAO’s report here.

About the FAO

Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office (FAO) provides independent analysis on the state of the Province's finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario.  Visit our website at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.

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For further information or to arrange interviews, please contact:

Kismet Baun l (416) 254-9232 l kbaun@fao-on.org l fao-on.org